Focus Universal Inc. General form of registration statement for all companies including face-amount certificate companies

General form of registration statement for all companies including face-amount certificate companies

10. Restatement (Tables)

10. Restatement (Tables)

6 Months Ended

12 Months Ended

Jun. 30, 2018

Dec. 31, 2017

Accounting Changes and Error Corrections [Abstract]

Restatements

	Previously reported						Restated
	For the six months ended						For the six months ended
	6/30/2017			Adjustment			6/30/2017

Revenue	$	211,086			680,427	{a}	$	891,513
Revenue - related party		–			6,571	{b}		6,571
Total revenue		211,086						898,084

Cost of Revenue		65,498			686,998	{a}		752,496

Gross Profit		145,588						145,588

Operation Expenses:
Compensation - officers		60,000						60,000
Research and development		109,929						109,929
Professional fees		69,777						69,777
General and administrative		123,083						123,083
Total Operating Expenses		362,789						362,789

Loss from Operations		(217,201	)					(217,201	)

Other Income (Expense)
Interest expense, net		53						53
Other income		4,763						4,763
Total other expense		4,815						4,815

Loss before income taxes		(212,885	)					(212,885	)

Income tax expense		800						800

Net Loss	$	(213,685	)				$	(213,685	)

Weight Average Number of Common Shares Outstanding - Basic and Diluted		34,574,706						34,574,706

Net Loss per common share
Basic and diluted	$	(0.01	)				$	(0.01	)

{a} The Company previously recorded shipment of sales shipped directly from vendor to customer as net of cost of goods sold. The Company corrected the error by recording sales at gross amount and separately record cost of goods sold amount.

{b} Revenue generated from Vitashower Corp., a company owned by the CEO, amounted to $6,571 for the six months ended June 30, 2017 was reclassified to be separately disclosed.

	Previously reported						Restated
	For the three months ended						For the three months ended
	6/30/2017			Adjustment			6/30/2017

Revenue	$	128,896			496,172	{a}	$	625,068
Revenue - related party		–			3,563	{b}		3,563
Total revenue		128,896						628,631

Cost of Revenue		45,163			499,736	{a}		544,898

Gross Profit		83,733						83,733

Operation Expenses:
Compensation - officers		30,000						30,000
Research and development		55,453						55,453
Professional fees		41,797						41,797
General and administrative		60,673						60,673
Total Operating Expenses		187,923						187,923

Loss from Operations		(104,190	)					(104,190	)

Other Income (Expense)
Interest expense, net		20						20
Other income		–						–
Total other expense		20						20

Loss before income taxes		(104,170	)					(104,170	)

Income tax expense		800						800

Net Loss	$	(104,970	)				$	(104,970	)

Weight Average Number of Common Shares Outstanding - Basic and Diluted		34,574,706						34,574,706

Net Loss per common share
Basic and diluted	$	(0.00	)				$	(0.00	)

{b} Revenue generated from Vitashower Corp., a company owned by the CEO, amounted to $3,563 for the three months ended June 30, 2017 was reclassified to be separately disclosed.

See below for result of 2016 restatement and reclassification.

	Previous reported							Restated
	12/31/2016			Adjustment				12/31/2016
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	340,073			(2	)		$	340,071
Accounts receivable		35,896			(10,332	)	{a}		25,564
Accounts receivable - related party		–			10,332		{a}		10,332
Inventories, net		104,832			(36,337	)	{b}		68,495
Prepaid expenses		7,962							7,962
Total Current Assets		488,763			–				452,424

Property and equipment, net		8,517			–				8,517

Other assets:
Deposits		24,726			–				24,726

Total assets:	$	522,006			–			$	485,667

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable and accrued liabilities	$	372,912			(4,399	)	{c}	$	368,513
Customer deposit		57,726			4,400		{c}		62,126
Income taxes payable		800			–				800
Total Current Liabilities		431,438							431,439
Non-current Liabilities
Deferred rent		468			–				468

Total Liabilities		431,906							431,907

Commitments and Contingencies
Stockholders' Equity:
Common stock, par value $0.001 per share, 75,000,000 shares authorized; 34,574,706 shares issued and outstanding as of December 31, 2017 and 2016, respectively		34,575			–				34,575
Additional paid-in capital		713,239			658,379		{d}		1,371,618
Accumulated deficit		(657,714	)		(694,719	)	{e}		(1,352,433	)
Total stockholders' equity		90,100							53,760

Total Liabilities and Stockholders' Equity	$	522,006						$	485,667

{a} The Company reclassified related party accounts receivable and payable balance into its own line item.

{b}The Company reserved $36,337 for slow moving inventory items.

{c} Customer deposit of $4,400 was reclassified out from accounts payable to correctly record in customer deposit.

{d} The Company and Perfecular Inc. entered into merger agreement on December 30, 2015. The two entities are merger under common control. Per ASC 805-50-45, entities merger under common control should be recorded using book value and retained earnings is carried into the consolidated financial statements. The Company erroneously eliminated Perfecular Inc.’s retained earnings through consolidation. An adjustment is made to properly record investment made to the merger and record retained earnings of Perfecular Inc.

{e} Accumulated adjustment effect in result of inventory reserve and adjustment to properly recorded investment made to the merger.

	Previously reported							Restated
	12/31/2016			Adjustment				12/31/2016

Revenue	$	337,496			778,723		{f}	$	1,116,219
Revenue - related party		–			5,759		{g}		5,759
Total revenue		337,496							1,121,978

Cost of Revenue		57,128			809,431		{f}{h}		866,559

Gross Profit		280,368							255,419

Operation Expenses:
Compensation - officers		121,385							121,385
Research and development		201,899							201,899
Professional fees		142,956							142,955
General and administrative		257,365			(1,155	)	{g}		256,210
Total Operating Expenses		723,605							722,449

Loss from Operations		(443,237	)						(467,030	)

Other Income (Expense)
Interest expense, net		(203	)		300		{g}		97
Other income		5,736			(5,148	)	{g}		588
Other expense		(1,600	)		1,012		{g}		(588	)
Total other expense		3,933							91

Loss before income taxes		(439,304	)						(466,939	)

Income tax provision		1,600			(1,105	)	{j}		495

Net Loss	$	(440,904	)					$	(467,434	)

Weight Average Number of Common Shares Outstanding - Basic and Diluted		34,574,706							34,574,706

Net Loss per common share
Basic and diluted	$	(0.01	)					$	(0.01	)

{f} The Company previously recorded shipment of sales shipped directly from vendor to customer as net of cost of goods sold. The Company corrected the error by recording sales at gross amount and separately record cost of goods sold amount.

{g} Other income and other expenses items were reclassified to other income statement accounts. Refund of rent expense of $1,155 was reclassified from other income to general and administrative expenses. Other expenses items including interest expense and cost of sales were reclassified to their respective accounts. Interest expense was reclassified from other income.

{h} The Company reserved $36,337 for slow moving inventory items into cost of goods sold.

{i}Income tax refund was reclassified from other income to income tax expense.

	Previously reported							Restated
	12/31/2016			Adjustment				12/31/2016

Cash flows from operating activities:
Net Loss	$	(440,904	)		(26,530	)		$	(467,434	)
Adjustments to reconcile net loss to net cash used in operating activities:
Inventory reserve		–			26,528		{j}		26,528
Depreciation expense		1,130							1,130
Changes in Operating Assets and Liabilities:
Accounts receivable		70,993			10,332		{k}		81,325
Accounts receivable - related party		–			(10,332	)	{k}		(10,332	)
Inventories		(53,258	)						(53,258	)
Prepaid expenses		6,999							6,999
Accounts payable and accrued liabilities		96,987			(4,402	)	{l}		92,585
Customer deposit		(82,303	)		4,400		{l}		(77,903	)
Deferred rent		(443	)						(443	)
Net cash flows used in operating activities		(400,799	)						(400,803	)

Cash flows from investing activities:
Purchase of property and equipment		(8,239	)						(8,239	)
Net cash flows used in investing activities		(8,239	)						(8,239	)

Cash flows from financing activities:
Repayment to related parties		(63,369	)						(63,368	)
Repayment to shareholders		(19,533	)						(19,534	)
Net cash flows provided by (used in) financing activities		(82,902	)						(82,902	)

Net Change in Cash and Cash Equivalents		(491,940	)						(491,944	)

Cash and cash equivalents - Beginning of Period		832,015							832,015

Cash and cash equivalents - End of Period	$	340,071						$	340,071

{j} The Company reserved $36,337 for slow moving inventory items into cost of goods sold.

{k} The Company reclassified related party accounts receivable and payable balance into its own line item.

{l} Customer deposit of $4,400 was reclassified out from accounts payable to correctly record in customer deposit.